Mr. DAVIS. I saw that figure.

The CHAIRMAN. That is pretty low, is it not?

Are there any questions?

Senator YOUNG. I have a question or two.

You stated that cattle numbers would increase if we had cheaper grain, is that right?

Mr. DAVIS. Yes, sir.

Senator YOUNG. And that would be true, too, if we had a diverted acreage program and permitted farmers to use hay or grass from that land to raise cattle?

Mr. DAVIS. That is right.

Senator YOUNG. Would it not also be true if you did away with farm price supports entirely and you had a lot of cheap grain on hand and cattle remained at the present price, wouldn't many more farmers go into production of cattle?

Mr. DAVIS. Yes. We saw a concrete example of that in the thirties, when wheat and cotton did not pay the expenses and taxes and the only alternative was to shift to dairy and beef cattle and sheep which more or less took care of themselves.

Senator YOUNG. I don't know what the figures are for Oklahoma but in Iowa the last 4 years they have increased cattle numbers by 25 percent, in my own State of North Dakota we have increased 31 percent. If we continue on with cheap feed more and more farmers will go into cattle production. The wheat program would hardly be worth voting for if we continue to lower support prices.

Mr. DAVIS. I think we have to learn to live with our know-how. We are all in this picture together. The producers of all commodities are right at or above the current demand and to me the only way we can do that is shut the entire factory down until we are able and need to use it.

Senator SCHOEPPEL. Mr. Davis, I am rather intrigued by your statement here. It has some good points in it. I rather envision that if that program goes in you are going to have an entirely controlled agricultural economy in this country. Isn't that true?

Mr. DAVIS. Senator, I think just the reverse. I think just the reverse. Make this rental payment attractive enough to where some folks will want it, but not attractive enough to where everybody wants it. We know we couldn't all rent it to the government and go fishing. But to me I think you are going to have the reverse condition. If you can take out enough total acreage completely we can hold agriculture economy in balance. Then you can leave those alone that still need to operate and let them operate to capacity and let them help pay for the program and I see no reason to become alarmed at all. In fact, I think it is getting away from control.

Senator YOUNG. You of course are predicating this upon a voluntary compliance type of administration.

Mr. DAVIS. That is right, on a rental basis.

Senator YOUNG. On a rental basis. Human nature being what it is, I can't be as optimistic as you are, but someone will have to supervise the administration of this thing, someone will have to make the determinations and someone will have to enforce the regulations against those who creep over the line.

Mr. DAVIS. That is right.

Senator YOUNG. That is going to be a problem administratively in a lot of places. We found a lot of difficulty in the programs we have tried now. Let me ask you one other thing here. You want 90 percent you say on all commodities?

Mr. DAVIS. I want it available. I don't think you will have to use it. Senator YOUNG. Take the fruit people. Let's get on their side of the fence a while. They are obtaining no fixed price supports as such. They operate and get considerable help under the section 32 funds.

Mr. DAVIS. That is right.

Senator YOUNG. Now, the fruitgrowers as such, it has been testified and pointed out-I am sorry my friend Spessard Holland isn't here today-want no part of these controls and they want no part of guaranteed prices, but they worked out a program they think is working pretty well on a voluntary basis.

Now under your program, voluntarily or otherwise, they would have to take out of production so many trees, whether it is oranges, grapefruit, prunes, raisins, what not.

Mr. DAVIS. The individual would not, Senator. If there are people that are ready to retire in their fruit business it would give them an opportunity to retire their complete orchard just like you could retire a complete cotton field.

By the way, one other place we are fortunate and that is one of the big reasons I think perhaps the farmers probably should be required to pay a portion. If they see the thing being abused, they say we are in this picture all together, you have to make this thing popular and make the folks want it, you have to make them see it and it is for our own good. If they are helping pay for it they are not going to be reluctant to say "Neighbor, let's get in line."

Senator YOUNG. That is something new presented here, where they stand part of this overall cost of the program, so far as I have attended these committee hearings.

Now, I have not heard that the cattle people, for instance, want to come under a program as such. There may be, for instance, certain sections that feel that way but here is the cattle industry the people who testified before us don't feel that they want to come under any support program for cattle because it will have all the attendant difficulties of controls, and a lot of those things which they don't like to have. Under your program they would be under this kind of a program.

Mr. DAVIS. Senator, if you followed my original statement here, 90 percent of parity at the option of producers of the various commodities voting in referendum. If there are some groups of fruits or vegetables or cattle that do not so desire, they can indicate such in the referendum. However, I feel that this program here will help the cowman and sheepman and help the poultryman by shutting down the complete agricultural factory so to speak. I am just as convinced as I am sitting here unless we have a strict enforcement of the use of diverted acres that you are going to have to go some route similar to that and when you boys in Washington begin receiving telegrams "they won't let me grow a milk cow on the diverted acres," it will be hard to stand. If you can take out half sections or complete fields you can leave the small attractive agricultural unit alone to operate to capacity.

Senator SCHOEPPEL. How would some of these young fellows coming on break into this ball game?

Mr. DAVIS. I think they stand a lot better chance, Senator, to break in this ball game, if you want to call it that, under this sort of program than they will by having a large number of acres and restricted use of the diverted acres, they are permitted to operate to capacity under the setup and if we can just shut the plant down similar to any manufacturer, that might be the solution.

Senator SCHOEPPEL. I will confess to you, sir, you have an interesting proposition presented here.

Senator THYE. Mr. Davis, the chairman requested all of you to give us some new ideas and suggestions, and you have done exactly that. You have come forth with a suggestion and you have come forth with some new ideas. You propose that the producer help himself by having a levy or tax imposed upon his production to finance the

program.

Mr. DAVIS. That is right.

Senator THYE. You are proposing to reduce your farm plant so as not to glut the market with surpluses which do nothing but destroy the market and cost the United States Government.

Mr. DAVIS. On all commodities straight across the board.

Senator THYE. Yes, sir; and surpluses now have become a burden on the farmer's price and a burden on the Treasury in carrying the storage expenditures for the surpluses. So you have given us someing new. You are a farmer or a producer at the present time? Mr. DAVIS. Yes, sir.

Senator THYE. How many acres? You spoke about 16,000 bushels of grain in 1932.

Mr. DAVIS. Right.

Senator THYE. What do you operate now?

Mr. DAVIS. I am operating a little ranch and some wheat. I run about 200 mother cows and operate about 250 acres of farmland. Senator THYE. And what farm organization do you belong to? Mr. DAVIS. I am a member of the Oklahoma Farm Bureau. Senator THYE. Are you an officer?

Mr. DAVIS. I have been. Currently I am president of the Pontonoc County Farm Bureau. Nine years running I was president of the State Farm Bureau.

Senator THYE. Do you attend State and annual meetings?

Mr. DAVIS. Yes, sir; I do, and this program will be presented at our annual meeting.

Senator THYE. Have you presented it before?

Mr. DAVIS. Not in its entirety. I have gone over it with some of the leaders and it will be presented for discussion at our annual meeting next week.

Senator THYE. It is somewhat of a self-help plan for agriculture. Mr. DAVIS. Yes, definitely, and of course we do have a tremendous reserve there in the event we need it. We are suggesting that half of the bill be paid by Government and half by agriculture.

Senator THYE. Would you propose there be made any special payments for soil-conserving practices where they would be possible? In some areas you summer fallow, other areas you try to get into grass. Are there any incentive payments for soil censervation practices envisioned in your program?

Mr. DAVIS. Yes, perhaps there could be some incentives on land taken out and definitely, as I outlined in my statement, land shall be protected by proper soil conservation practices, land and water use. Senator THYE. How do you propose to collect the tax?

Mr. DAVIS. That, of course, is one that would have to be discussed and studied considerably, but there could be a plan similar to our sales tax in Oklahoma.

Senator THYE. I was going to comment upon that. We collect a sales tax now, and that is a method that you could probably use. Mr. Chairman, I say this, that here is one gentleman who didn't fail us and who has come up with a thought-provoking statement. The CHAIRMAN. Thank you, Mr. Davis.

Now, let me make certain that as to these acres you propose to take out of production, that is to be done on a voluntary basis? Mr. DAVIS. That is right.

The CHAIRMAN. We had a suggestion whereby it was the proposal of someone that we cut our plant down now and use our surpluses and let the Government step in and help to pay the farmer for this curtailment, so that we can get back on an even keel.

In other words, follow the same method as to the farmer as the Government followed with industry. If you will recall, we spent probably $50 billion to get industry adjusted from war to peace. That is approximately what it cost the Government.

Why wouldn't it be feasible to apply the same principle to the farmer, since he built one of the greatest factories ever known to produce food for the war?

Mr. DAVIS. I think that certainly would be logical and would be comparable, I am sure.

The CHAIRMAN. Thank you ever so much.

I wish to place this in the record at this point, a telegram addressed to me from Congressman Wickersham.

(The telegram referred to follows:)

Senator ALLEN J. ELLENDER,

A. and M. College, Stillwater, Okla.:

WASHINGTON, D. C., November 8, 1955.

Deeply appreciate your efforts and that of committee on behalf farmers. Regret unable to attend hearings.

The CHAIRMAN. Is Mr. Smith here?

VICTOR WICKERSHAM,
Member of Congress.

STATEMENT OF J. B. SMITH, PAWHUSKA, OKLA.

Mr. SMITH. I am J. B. Smith, Pawhuska, Okla., and I have a prepared statement, very short one, which I would like to read to you. The CHAIRMAN. All right.

Mr. SMITH. As a beef-cattle producer in Oklahoma, I should like to make a few remarks with reference to the current farm program and its effect on the cattle business.

First of all, acreage allotments, to control production of some basic commodities, have had the effect of diverting more acreage to grass and feed crops, which without restrictions to their use, are being marketed through beef cattle and are increasing the already surplus supply of beef.

Since early summer, finished cattle grading choice have been marketed below cost of production while stocker and breeding cattle, a relatively raw product, have been sold into the diverted acreage situation at a higher price per pound that their counterpart as finished cattle. This is placing the beef producer of a nonsupported commodity at an extreme disadvantage. What might at first look as an advantage to the rancher in selling stocker cattle can only be temporary and short-lived because the bulk of those stocker and breeding cattle must find their way to the consumer as finished animals.

I am enthusiastic about the industry beef promotion program, and it should be accelerated. Beef consumption since 1951 has increased 24 pounds per person, but in spite of this, we are still selling finished cattle below cost of production.

In summary, I think that if the commodity group wants supported prices, that is their business, but I believe there should be restrictions on the acres that are taken out of production for a certain commodity which are being diverted into grass and feed crops so that one farm commodity will not produce at another's expense.

The CHAIRMAN. Mr. Smith, in working out a plan as you suggest, would you pay the farmer anything on these diverted acres to keep them out of production?

Mr. SMITH. I am sure that would have to be done.

The CHAIRMAN. Have you any formula as to how that should be done? In other words, how much or what should be included in this formula?

Mr. SMITH. I don't wish to touch on it. I am a beef producer. If the controlled acres are taken care of and not put in competition with rangemen and feeders, our problem would be worked out.

The CHAIRMAN. You heard Mr. Davis state it would be a hard problem to do that, and I am trying to get from you some idea as to how we could take care of that situation to satisfy the average farmer. Let us say a man has 500 acres of land and of that amount there would be a hundred acres diverted and assuming that he has sufficient tractors and machinery to work the 500 acres, in estimating the cost that should be paid on this hundred acres, would you consider the wear and tear on his machinery, would you consider taxes and other items of that nature?

Mr. SMITH. I think he would have to be compensated for the hundred acres laying idle. His business has to be run at full production and if it isn't run at full production he has to be compensated for those acres laid out.

The CHAIRMAN. Some suggestions have been made to give him, let's say, 50 percent of what he would normally make as profit on that acreage. Would you think that would be a good procedure to follow, or have you any other ideas?

Mr. SMITH. I have no ideas.

The CHAIRMAN. Any other questions?

Senator THYE. I would like to ask Mr. Smith a few questions.
You are a rancher?

Mr. SMITH. Yes, sir.

Senator THYE. And you have an operation that has brood cows? You are not a feeder?